eBrief: Gordons legal Employment Update – 22 September 2016

Welcome to this week’s Employment Law update from the Gordons’ Team…  

Tribunal Costs Guidance

Below is a quick recap as to when an Employment Tribunal can make an award of costs:

“A costs order may be made where a Tribunal considers that:

• a party (or the party’s representative) has acted vexatiously, abusively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or
• any claim or response had no reasonable prospects of success”

This week, the EAT has produced a pair of decisions which help further clarify when costs can be awarded.

In the case of Isteed v Redbridge London Borough Council, the EAT made it clear that there must be a causal link between any unreasonable conduct and the wasted costs themselves.

In the case of Hussain v Nottinghamshire Healthcare NHS Trust, it was confirmed that a warning given to a Claimant by the Judge during the substantive hearing as to the weakness of certain claims is not, of itself, evidence of a concluded view on costs. Therefore, there was no bias on the part of the Tribunal Judge and costs could still be awarded.

Comment: Costs have historically been the Holy Grail of Employment Tribunal litigation so far as tribunal advocates and litigants are concerned and also the exception, rather than the rule. However, from our experience, Tribunals are becoming increasingly willing to make costs orders, particularly where robust costs warnings are issued early during litigation.

Tattoos and Social Media: Are They Affecting Employment Prospects?

ACAS have recently released a report revealing that negative attitudes towards visible tattoos may be costing employers the chance to recruit talented young employees. According to a 2015 YouGov poll, nearly a fifth of UK adults have had a tattoo with under-40s the most likely to have had ink applied.

A company dress-code policy is perfectly legal so long as that policy does not contravene the Equality Act 2010 by discriminating in respect of any protected characteristics (age, disability, gender reassignment, religion or belief, sex or sexual discrimination). Stephen Williams, the ACAS Head of Equality, has said:

“Businesses are perfectly within their right to have rules around appearance at work but these rules should be based on the law where appropriate, and the needs of the business, not managers’ personal preferences.”

Some industries, such as airlines, are unlikely to put an individual who has any piercing or tattoos through the application stage on the basis that the business has ‘to supply a picture’. Such a strict approach to appearance is reciprocated through many other industries including accountancy firms, removal firms and the public sector according to the report.

If the business in question has a genuine reason for imposing a dress code, such as communicating a corporate image or professionalism, then they are well within their rights to reject applicants who do not conform. However, according to Andrew Timming at St Andrews University, a change in attitudes is inevitable with a ‘tidal wave of young people with tattoos … [who] employers are going to have to accept … may potentially have a place at work.’

In terms of social media, CIPD PM have released a report that suggests HR are increasingly consulting social networking sites in their recruitment processes. According to the report, 36% of HR professionals surveyed had declined to take a candidate further in the recruitment process after checking their social media posts. The Managing Director of recruitment giants Monster stated:

“More and more employees and employers are looking for a good cultural fit, so often a Google search will tell a recruiter more than a CV can.”

As with tattoos, such reasons are legitimate so long as they are not taken out of context to the point where they become discriminatory.

Comment: Both tattoos and a prospective employee’s social media profile are unlikely to lead to discrimination claims from unsuccessful applicants. However, care should be exercised in respect of the reasons why such a choice has been made. Legitimate reasons can include how a business’ customers will view the professionalism of people who have visible tattoos or how one’s behaviour on social media may be out of sync with the business’ cultural identity. Reasons that will almost certainly become problematic arise from the protected characteristics in the Equality Act such as declining an applicant based on their religious wear. Care must be taken to keep reasons legitimate and in context with the law.  

Governing Body of Sheredes School v Davies: An Update on Time Extensions for Unfair Dismissal

This case highlights the importance of respecting time limits when bringing or receiving a claim for unfair dismissal.

If an individual does not bring their complaint before a tribunal within three months, beginning with the effective date of termination, then the judge will be within his remit to reject the claim on the basis of it being out of time.

However, there is an exception under section 111(2)(b) of the Employment Rights Act 1996 that states that a claim may be brought:

‘within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of [the] period of three months’

As such, the Claimant in this case instructed solicitors within the three-month time limit. However, a Solicitors’ Regulatory Authority (SRA) intervention resulted in those solicitors advising him to seek new representation without guidance on the time limit in which he needed to bring his claim. The SRA prevented the original solicitors from contacting any clients and as such the time-limit expired without the Claimant knowing.

When the individual eventually presented his claim, the Employment Judge allowed an extension of time on the basis that a SRA intervention was a special reason for not presenting the claim in time under s111(2)(b) as above. On appeal, however, the Employment Appeal Tribunal reversed the decision, citing the original solicitor’s incompetence as the reason for failing to present the claim in time, not the SRA intervention. 

A tribunal has previously ruled that if an employee is reasonably ignorant (i.e. inexperienced with no knowledge of employment tribunals or the respective time-limits), then it is not reasonably practicable for him to comply with the time-limits (John Lewis Partnership v Chairman). However, in this case, the individual’s original solicitors should have informed him that there was a time-limit in which to bring his claim. Their failure to do so resulted in the individual losing his chance to present his claim before the tribunal.

Comment: Perhaps a harsh decision for the employee, but a lesson learnt about seeking credible instructions. If you are faced with a claim for unfair dismissal, always ensure that the claim has been brought within the time-limits. Unless it was not reasonably practicable to present the claim within three months, it is more than likely that there will be no claim to answer as the tribunal will have no jurisdiction. NOTE: the ACAS pre-claim conciliation procedure can potentially extend the 3 month limit by a further 6 weeks.

Pre-Resignation Early Conciliation – Compass Group UK & Ireland v Morgan

For the vast majority of employment tribunal claims it is now a mandatory requirement for prospective claimants to go through the Early Conciliation (“EC”) process and to obtain an EC Certificate before they can issue proceedings. However, there has been a question mark as to whether an EC Certificate can apply to future events.

The Employment Appeal Tribunal (EAT) was asked to consider this issue in the case of Compass Group UK & Ireland Limited v Morgan. In this case, the Claimant was having problems at work. She engaged in the EC process and an EC certificate was issued.  She resigned a few weeks later, largely due to the issues raised during the EC process and brought a claim for constructive unfair dismissal. The Respondent argued that the Tribunal did not have the power to hear the claim for constructive unfair dismissal because the Claimant’s resignation took place after the EC certificate was issued. 

The EAT held that the EC certificate can cover future events if they are related to the matter for which the certificate was obtained (which was the case here). However, if the future events are an entirely new and unrelated matter, then it is likely that a new EC certificate will need to be obtained.

Comment: This case clears up a grey area in respect of the ACAS EC procedure.  Employers therefore should be aware that they are not necessarily “off the hook” if there are any future events that take place after an EC certificate is issued and the Claimant does not look to contact ACAS again for a further ‘round’ of EC.

Corporate Pay and Governance Inquiry

The Business, Innovation and Skills (BIS) Committee has launched an inquiry on corporate governance, focusing on executive pay, directors’ duties and boardroom composition following recent inquiries into BHS and Sports Direct. The BIS committee will examine the following terms of reference amongst others:

Directors Duties:

• Is the duty to promote the long-term success of the company clear and enforceable?
• How are the interests of shareholders, current and former employees best balanced?
• How best should the decisions of Boards be scrutinised and open to challenge?

Executive Pay:

• How should executive pay take account of companies’ long-term performance?
• Should executive pay reflect the value added by executives to companies relative to more junior employees? If so, how?
• Do recent high-profile shareholder actions demonstrate that the current framework for controlling executive pay is bedding in effectively? Should shareholders have a greater role?

Composition of Boards:

• How should greater diversity of board membership be achieved? What should diversity include, e.g. gender, ethnicity, age, sexuality, disability, experience, socio-economic background?
• Should there be worker representation on boards and/or remuneration committees? If so, what form should this take?
• What more should be done to increase the number of women in Executive positions on boards?

Comment: The outcome of this inquiry may eventually have significant impacts on how board decisions and actions are regulated and compensated. With particular reference to employment law, any provisions put in place to diversify the composition of boards may be prove interesting with a careful balance being required between illegal positive discrimination and the desired outcome.

If you require any further information on the above developments please do not hesitate to get in contact with a member of the Employment Team, on the following number 0113 227 0100.

Gordons LLP won Best Regional HR/Employment team in the Legal 500 Awards 2014/2015. For further information on any of the above changes please contact any member of our award winning team by phone on 0113 227 0100 or by visiting our website:- https://www.gordonsllp.com/law-services